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Socio-Economic Impact of Mobile Broadband in Thailand and Contribution to the Digital Economy April 2015

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Socio-Economic Impact of Mobile Broadband in Thailand and Contribution to the Digital Economy April 2015 Socio-economic impact of mobile broadband in Thailand and contribution to the digital economy April 2015 Copyright © 2015 GSM Association SOCIO-ECONOMIC IMPACT OF MOBILE BROADBAND IN THAILAND SOCIO-ECONOMIC IMPACT OF MOBILE BROADBAND IN THAILAND About the GSMA Copyright © 2015. Analysys Mason Limited has produced The GSMA represents the interests of mobile operators the information contained herein for the GSMA. The CONTENTS worldwide, uniting nearly 800 operators with more ownership, use and disclosure of this information are than 250 companies in the broader mobile ecosystem, subject to the Commercial Terms contained in the contract 1 EXECUTIVE SUMMARY 2 including handset and device makers, software between Analysys Mason Limited and the GSMA. 1.1 Key findings 2 companies, equipment providers and Internet companies, as well as organisations in adjacent industry sectors. The Analysys Mason Limited GSMA also produces industry-leading events such as Bush House, North West Wing 2 INTRODUCTION TO THE STUDY 8 Mobile World Congress, Mobile World Congress Shanghai Aldwych 2.1 Background and objectives 9 and the Mobile 360 Series conferences. London WC2B 4PJ 2.2 Structure of this report 9 UK For more information, please visit the GSMA corporate Registered in England No. 5177472 website at www.gsma.com/spectrum 3 THE TELECOMMUNICATIONS MARKET IN THAILAND 11 Tel: +44 (0)20 7395 9000 3.1 Summary of broadband network availability 12 Follow the GSMA on Twitter: @GSMApolicy Fax: +44 (0)20 7395 9001 3.2 Thailand’s digital economy goals, and the role of the mobile sector 16 [email protected] www.analysysmason.com 4 BENEFITS FROM BROADBAND NETWORKS AND SERVICES 18 4.1 Economic impact 19 4.2 Digital inclusion and other social impacts 21 5 SUPPORTING THE DEVELOPMENT OF THE MOBILE MARKET 28 IN THAILAND 5.1 Spectrum assignment 28 5.2 Effective regulation 30 5.3 Managing network costs 31 5.4 Ensuring a level playing field with state-owned companies 32 6 RECOMMENDATIONS FOR MOBILE BROADBAND GROWTH 34 Annex A: Methodology for economic impact assessment 38 Annex B: Modelling inputs and assumptions 42 Annex C: International examples of digital economy initiatives 43 Erik Almqvist, Janette Stewart and Gergana Rangelova Ref: 2002941-103 Executive summary | 1 SOCIO-ECONOMIC IMPACT OF MOBILE BROADBAND IN THAILAND SOCIO-ECONOMIC IMPACT OF MOBILE BROADBAND IN THAILAND Executive Summary Analysys Mason was appointed by the GSM Association (GSMA) to examine developments in the mobile broadband market in Thailand and the socio-economic benefits associated with these developments. The report also discusses how government policy in Thailand can support the realisation of these benefits, providing a significant boost to the government published goals for further development of the digital economy. Key findings from the study are as follows: 1.1 Key findings EcONOMIC IMPACT OF BROADBAND As operators invest in deploying new mobile The market in Thailand is at a crossroads: despite an Mobile broadband is thus an important enabler for the What this implies for the Thai economy is that infrastructure, economic activity and new jobs initial delay, the commercial launch of 3G networks digital economy and for digital inclusion. In particular, a cumulative GDP increase of USD23 billion associated with the deployment of network saw a substantial increase in the use of mobile data by further stimulating mobile broadband take-up, (THB730 billion) could be created by the end of infrastructure is created. Spill-over effects also occur, 4. In addition to this GDP increment, the roll-out services; therefore strong demand for 4G is now widely Thailand will benefit from a range of positive socio- 2020 such that the impact on the wider economy and of new broadband infrastructure (including mobile anticipated. However, since the planned award of 4G economic impacts leading towards early achievement the associated social impact can be far-reaching, broadband) is expected to create a positive impact spectrum in Thailand has been delayed, some operators of the six pillars of the ‘Digital Economy Plan’ that the improving productivity, fuelling innovation and driving on the jobs market in Thailand by creating new skilled have moved ahead with initial deployments of 4G Government of Thailand has published. Key to this is the creation of new businesses as well as providing jobs. This will contribute positive changes in the general within spectrum that has been re-farmed from 3G use.1 the release of spectrum for 4G, along with policies improved access to personalised healthcare, online population and the workforce in Thailand by developing Although the 4G spectrum award has been delayed, aimed at promoting a truly competitive, dynamic, services and facilitating smart cities. abilities and skills to use new infrastructure and the the government of Thailand has strong ambitions to investment-led mobile sector. latest emerging technologies. turn Thailand into a digital economy, which ultimately As few empirical studies exist that investigate depends on better broadband infrastructure – including the socio-economic impact of mobile broadband A significant proportion of these benefits could come mobile infrastructure – being available. specifically, we have estimated the impact of total from mobile broadband specifically (compared to broadband penetration (number of connections) broadband as a whole), assuming that the legislative on economic prosperity.2 We define ‘broadband’ to and policy environment in Thailand continues to include both fixed and mobile broadband connections, support the mobile sector (e.g. in terms of availability including the use of smartphones for data, but of sufficient spectrum to enable investment in new excluding basic mobile handsets.3 technology and infrastructure). Based on the modelling we have conducted, we estimate that if the Thai authorities are able to facilitate the development of a vibrant broadband market (which will also meet the targets set by the Digital Economy Plan), broadband connections penetration in the country could increase from 52% in 2013 to 133% by 2020. 2. There is a lack of published empirical studies isolating the effects of mobile broadband from those of broadband networks more generally as a result of the relatively recent introduction of mobile broadband to 1. This is using spectrum in the 2.1GHz band. the market. Hence most published studies refer to benefits generated by broadband connections of all types. 3. Previous studies investigating the impact of broadband on the economy may not be comparable with the current study due to differences in the definition of broadband penetration (e.g. the difference between broadband penetration and broadband connection penetration, the latter exhibiting diminishing returns as users get more than one broadband connection), differences in technology mix, as well as differences in penetration forecasts. 4. The GDP increment is expressed in nominal terms. The estimated GDP impact is not discounted (e.g. it does not take into account the time value of money). For comparison, the equivalent amount based on USD PPP (Purchasing Power Parity) – the basis used in some other reports for estimating socio-economic impacts - would be USD56billion 2 | Executive summary Executive summary | 3 SOCIO-ECONOMIC IMPACT OF MOBILE BROADBAND IN THAILAND SOCIO-ECONOMIC IMPACT OF MOBILE BROADBAND IN THAILAND SOCIAL IMPACTS OF BROADBAND AND THE ROLE POLICY CONSIDERATIONS TO SUPPORT THE OF MOBILE BROADBAND AS AN ENABLER FOR THE REALISATION OF MOBILE BROADBAND BENEFITS DIGITAL ECONOMY Although difficult to quantify in monetary terms, In Thailand, operators have focused on the e-money In addition to the award of 4G spectrum, there are • While advanced 3G and 4G technologies enable social benefits constitute an important part of the and e-commerce fields to date but it is expected that a number of other areas where appropriate policy mobile networks to carry mobile data traffic more overall value of broadband investments. In Thailand, the further roll-out of 4G infrastructure will provide and regulation will be required to ensure that mobile efficiently, operators need to ensure that the costs these social benefits are particularly relevant since the a platform to significantly extend current offerings broadband develops successfully in Thailand: of rolling out new technologies are managed in the most efficient way.Voluntary infrastructure sharing government of Thailand has published a series of digital both in terms of availability and take-up as well as • Ensuring a level-playing field with state-owned has been shown in other markets to be one way economy goals as part of its Digital Economy Plan. generating new ones. Successful applications already companies. Network competition in the mobile offered in Thailand that are well aligned with the of achieving this, while also potentially providing In the wider Asia–Pacific region, mobile operators have market and in telecoms services more broadly government of Thailand’s digital economy goals other benefits such as better availability of services been very active in participating in this digitisation. has been shown to provide various advantages include the ‘Farmer Information Superhighway’ through further roll-out into less populated areas. Among the digital initiatives launched by major internationally. Telecommunications policy in service from DTAC, and the ‘True-Money’ e-payment operators around the world, tracked by Analysys most markets is aimed at promoting
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